Inherited mortgage shared with sibling

getmore4less

MoonShade wrote: »

Jennie etc: The bank have been informed and we can take over the mortgage. My other two siblings are still taking their share. Just myself and my brother are taking over the home.

How are you paying their other siblings shares

Has the bank gone through the application process yet

How will you own the house if you have him paying the mortgage does he own more, who is responsible for maintenance, can he make changes without your agreement...

It will not be your main residence that will potentially involve future CGT issues...


if you have another house mortgage it will impact changes to that and if you don't when you come to buy that's you stuck with the 3% extra SDLT

csgohan4

Money and family should never mix , how much is your family worth ?

Brock_and_Roll

<I>Jennie etc: The bank have been informed and we can take over the mortgage. My other two siblings are still taking their share. Just myself and my brother are taking over the home. </i>


That is almost certainly a mis-understanding. What the bank means is that, subject to qualification & approval, they would be happy for the relatives to have a mortgage on the property.


Legally, the Executor has a duty to realise the assets of the estate and to settle the debts. A dead person cannot have a mortgage - so legally it will need to be repaid from the assets of the estate - this could be via a sale to the relatives with a new mortgage advance from the existing bank.


I have to say that this happened to me after the death of my own father - legally things can get very, very complicated indeed - and I am a banker! I would strongly advise a clean break here.


With regards to the sale of the property I managed to persuade the bank to hold fire for 18 months whilst various legal issues, disputes etc were resolved - but this took a lot of persuading on my part!

Jenniefour

As has been said, I think what the bank means is that you can have a mortgage if you and your brother pass the affordability criteria. Check with them. If you decide to let out the house you would need to get a BTL mortgage, not a residential mortgage. Which has it's own different lending criteria. Best to get back to the bank and ask them to explain properly what they require in both scenario's.

What you both need to consider is the much longer term. For example, are you happy with, effectively, not being able to benefit from your inheritance for a long time if you agree that your brother lives there? How long can he live there? Do you want to have the anxiety about whether he would keep up mortgage payments? Who pays for repairs? What if you decide you would like your share of the money at some point? Would your brother be happy to sell, or would he be able to afford to buy you out? What happens if he were to refuse to leave?

If you let the house then you need to become familiar with the responsibilities of being a landlord, read G_M's guide's. Including paying tax. Keeping up with repairs etc. This option still has risks attached e.g. tenant not paying rent and it would then take about six months to get them out through the courts. That might work as an investment for the future if your brother agrees and moves out. In any event you would still need to have a clear agreement between you about selling the house if one of you wants the money instead, without one of you needing to force a sale through the courts - which is expensive. Sounds like you and your brother want different outcomes from the outset. That does not bode well for the future, including your relationship with each other. My advice, based on the fact that you already have two different agendas, would be to sell up.

csgohan4

Renting out a property no longer is profitable for everyone, do you know the tax incentives are reducing soon? the legal and other tax implications?


Renting out is not a quick rich scheme

Wookey

Get a deal done with your siblings, you either all agree to rent it out, sell it, or sell it whereby one of you buys out the rest, for the last option you could agree a small discount to make things run smoother between you's. I would ask the solicitor dealing with this to incorporate this as part of his winding up of the estate. I would not go joint mortgage with a brother or sister on a mortgage as you have no clue as to what would happen in there personal life with regard to separation/divorce/death in the years ahead and subsequent claims that could arise due to court settlements. If they want to continue to live there thats fine but they need to buy out the rest of the people who have a share.